04 Oct Considering Purchasing an Investment Property?
One of the safest investments you can make is by owning and renting a residential property. Over time, home values will rise or fall, but an investment property will give you regular, steady income that you can put towards your own debt or even retirement. Real estate investing can be done on any scale and catered to the more conservative personality or someone who doesn’t mind taking a bit of a risk.
You can start with just one property or even ten, there is no one way to invest in real estate. Your ideal investment strategy depends on how much time and money you are willing to commit and your level of risk tolerance. I’ve outlined a few easy strategies to help you decide whether this could be the right choice for you.
Keep your current home as a rental, and search for your next home. The Calgary market is going through quite a bit of change, so now may be the time to take on this strategy. House prices and sales have decreased from last year, and due to the downturn in the energy sector, many people who were looking to purchase may now be looking to rent instead. This is a win/win situation, as you can possibly purchase a new home for slightly cheaper than you would have a year ago and have a large pool of candidates to rent your current home too. When you find the right tenant, you can continue to build equity and generate some extra income as the market climbs.
Purchase a brand-new condo in the city. The demand for trendy, boutique condos in Calgary has gone sky high in recent years, and developers have flocked to the city to meet that demand. Young couples and singles prefer condos because they offer easy living in some of the best neighbourhoods. In some cases, the builders are offering very attractive purchase plans that allow you to secure a deal on a great place today and hold off closing for a year or 18 months. However, be aware of the tax implications of buying simply to re-sell, and don’t overlook these fancy new developments for their rental potential as well.
Add an income suite to your existing home. Building a basement apartment or adding on to your home may be a better option for some potential investors. It will allow you an additional stream of income that can pay for the renovations and increases the value of your home, all in one shot. In Calgary, the city has granted an extension for homeowners wishing to create a legally conforming secondary unit in their homes. If you have the extra space, and your home is located in an area that allows this type of zoning, this may be the best choice for you. Visit Calgary.ca to check the current zoning regulations.